Apparel Online Bangladesh Magazine November Issue 2018 | Page 37

BANGLADESH CANVAS Bangladesh can double its trade in South Asia: WB report World’s second biggest apparel manufacturer and exporter, Bangladesh, has the potential to more than double its trade with South Asian nations by exploring intra-regional trade, the World Bank has said in its report published recently. The global lender, in its report said, intra-regional trade in South Asia, which remains one of the lowest in the world, has the potential to grow up to three times from US $ 23 billion now; just by removing man-made barriers like tariffs and distrust. The report titled ‘A Glass Half Full: The Promise of Regional Trade in South Asia’ was published jointly by WB and the Policy Research Institute of Bangladesh. The report was launched during an event at Hotel Amrai in Dhaka. Bangladesh’s Finance Minister AMA Muhith was present at the programme. Trade within the South Asian region accounts for about 5 per cent of the region’s total trade, the report said, dubbing it whimsically low against 50 per cent in East Asia and the Pacific. It said the large gaps between actual and potential trade arise because countries in the region have erected barriers against each other. The World Bank identified four critical barriers towards intra- regional trade: tariffs and para tariffs, real and perceived non- tariff barriers, connectivity costs and a broader trust deficit. Sanjay Kathuria, World Bank’s Lead Economist and Lead Author of the report, said, “Trust between countries is in short supply in South Asia.” Zaidi Sattar, Chairman of Organising Institution Policy Research Institute, said South Asia has the potential to stimulate rapid growth and economic prosperity in the region and contribute to pulling millions out of poverty. “The region’s trade with the rest of the world is leaping big for the last quarter century. But, the intra-regional trade has declined.” The intra-regional trade has come down to 2.5 per cent from 5 per cent, posted before the signing of the South Asian Free Trade Area (SAFTA) agreement in 2004, said Sattar citing a PRI research. The WB said the costs of trade are much higher within South Asia compared to other regions. The report stated, “The average tariff in South Asia is more than double the world’s average. South Asian countries have greater protection for imports from the region than from the rest of the world.” The report said that the countries impose high para-tariffs and more than one-third of the intra-regional trade falls under sensitive lists, comprising goods not included under the SAFTA’s tariff liberalisation. Trade within the South Asian region accounts for about 5 per cent of the region’s total trade, the report said, dubbing it whimsically low against 50 per cent in East Asia and the Pacific. It said the large gaps between actual and potential trade arise because countries in the region have erected barriers against each other. In case of Bangladesh, nearly 46 per cent of the country’s imports from the region fall under the sensitive lists. “The South Asian countries are yet to reap the benefits of shared land borders. This arises from deficiencies in border regimes, including limited information flows on non-tariff measures, and inadequate use of modern clearance procedures,” the report further elaborated. Limited air connectivity makes regional trade and investment costlier. The report recommends targeting sensitive lists and para tariffs to enable real progress on the SAFTA and calls for a multi- pronged effort towards addressing non-tariff barriers, focusing on information flows, procedures, and infrastructure. Bangladesh’s trade with South Asia is US $ 7.6 billion, which is about 9 per cent of its global trade of US $ 84.3 billion. The report said increased regional trade can accelerate Bangladesh’s growth and create more employment opportunity for men and women. “Bangladesh can become an economic powerhouse by deepening regional and global integration in trade, connectivity, energy, and investment,” said Qimiao Fan, Country Director of the WB for Bangladesh, Bhutan, and Nepal. For increased regional trade, the country needs to focus on improving its trade policy regime. The report said limited air connectivity with South Asia is inhibiting Bangladesh from taking full advantage of potential investment and trade in services. Addressing the programme, Finance Minister AMA Muhith said it is not possible to go back to the pre-partition era when the market of the subcontinent was integrated. “We should maintain good relationship with the neighbouring countries and allow more cross-border trade,” FM stated. www.apparelresources.com | November 2018 | Apparel Online Bangladesh 37